ONE WORLD, READY OR NOT: THE MANIC LOGIC OF GLOBAL CAPITALISM by William
Greider Simon and Schuster 463 pp.

To write One World, Ready or Not William Greider travelled the
world - a fact of which he ostentatiously reminds us by by using foreign-language
phrases for many of his chapter titles. He talked to scores of people,
and digested a mountain of books. He did everything, in short, except run
his ideas and assertions past a competent economist, to make sure that
he had not made any obvious errors.

The result is peculiar: this book evidently involved an immense amount
of hard work, yet over and over again it gets easy things, facts that could
have been checked in a few minutes in any good library, utterly wrong.
At one point, for example, Greider makes the astonishing assertion that
international comparisons of labor's share of the returns from production
are difficult, and then quotes some misleading data that seem to show a
massive redistribution from labor to capital in the United States and other
advanced countries [p. 64]. I say astonishing, both because such information
is very easy to find, and because anyone even slightly familiar with U.S.
data knows that the share of wages and benefits in national income has
been remarkably steady (at about 73 percent) for the past generation. At
another point, Greider points to the near-tripling of imports as a share
of manufacturing output between the 70s and the 90s, and asserts that "If
America's trading position had held constant .. the level of its exports
would not [have been] much different ... but the volume of its imports
should have been two thirds smaller". [p. 186] But over those same
years exports as a share of output more than doubled; the truth is that
the net effect of growing trade on the number of manufacturing jobs in
this country has been fairly small. And in some cases Greider's statistical
naivete is mind-boggling - as when he attempts to impress the reader with
the growing might of giant multinational companies by citing raw dollar
numbers on their sales, unadjusted even for inflation, let alone for the
growth of the market (in fact large companies have accounted for a steadily
declining share of the U.S. economy over the last generation). [p.13]

These are not trivial slips. In each case Greider's alleged fact is
central to his thesis - and this thesis is supposed to be the main point
of the book. For One World, Ready or Not is not, essentially, a
work of reportage. It tells many interesting stories, but they are there
not for color but to support a grand vision of what is happening in the
world. How strange, then, that Greider should have failed to check the
simple things. But perhaps the problem was that anyone competent enough
to correct Greider's facts would also have asked him embarrassing questions
about that grand vision.

Greider believes that all of the difficulties and dislocations of the
modern world economy can be traced ultimately to a single cause: supply
is outstripping demand. As efficiency increases in the advanced nations
and new industrial centers emerge in the developing world, demand simply
cannot keep up, because of the "faltering ability of the world's consumers
to keep up with the new production capacities being created" [ p.
211]. The result is persistent global excess capacity, producing ever-greater
downward pressure on prices and above all wages.

This thesis may sound persuasive, but as soon as you think hard about
it you realize that it doesn't hang together. To take just one of its problems:
all of the increased production in the world has as a necessary counterpart
increased income - every dollar of sales must also represent a dollar of
wages or profits to somebody. And there are only two things you can do
with income: save it or spend it. So if we are really suffering from global
oversupply, we must be suffering from a global excess of savings compared
with investment opportunities. Are we? On the contrary, if anything we
seem to be suffering from declining savings rates in the advanced countries;
while savings have been rising in the developing world, investment demand
has surged even more.

The Victorian economist Alfred Marshall once warned that "the most
reckless and treacherous of all theorists is he who professes to let facts
and figures speak for themselves". Greider's book contains many facts,
most though not all of them true; but they are selective facts, chosen
to support a predetermined theory. We hear about China's trade surplus
vis-a-vis the United States, but not about the massive trade deficits of
Malaysia and Thailand, about plant closings but not about the labor shortages
currently pervasive in America's heartland.

So read One World, Ready or Not for the stories; but remember
that the stories are chosen to support a theory, and that as a theorist
Greider is not only reckless but simplistic, and remarkably ill-informed.